Japan Market Update - May 2006 Edition

Hi ,

Golden Week is here and, in several days, we will see reports on its impact on business. While Golden Week remains a popular time to travel, Japanese travelers have become more savvy--often preferring travel closer to home or during off-peak periods to avoid top airfares during holiday seasons. Heavy travel periods such as Golden Week, Summer Obon season, and Oshogatsu (New Year's Period), however, continue to attract travelers willing to spend more and pay higher airfares because they are unable to get away at other times during the year.

In Japan, Kyodo News reported last week that a new "wealthy class" is helping high-end retailers do exceptionally well there. Department stores are able to move prohibitively priced luxury goods such as watches, art, and jewelry, while convenience stores are seeing a reverse trend of lower sales. The difference between this pattern and consumption recoveries of the past is that the new wealthy class is fairly anonymous, according to an industry analyst. Big spenders these days are "thought to be chiefly entrepreneurs of information technology enterprises and individual stock market investors," and are NOT on lists of customers compiled over the years by department stores. These new customers are referred to as the "unknown customers." Department stores and specialty shops are working feverishly to encourage high-ticket purchasers to sign up for credit cards or store cards in order to capture customer information, with the hopes of strengthening relationships with the "unknown customer."

More intense research, trend watching, data base development, and data mining are critical as Japan's economy recovers and new leaders in travel and spending emerge--all with sophisticated tastes and new interests. PacRim continues to poll the Japanese consumer, both on-line and in person to formally and informally measure trends. Our office and contacts in Japan, and Guam are primed to observe and report on changes that affect our clients and their marketing efforts. As summer approaches and you review 3rd and 4th quarter advertising and marketing plans, please keep PacRim Marketing in mind if you need help implementing plans or obtaining more in-depth knowledge of your customers or target market.

Warmest regards,
Dave Erdman
derdman@pacrimmarketing.com

*Japan Market News
-----Travel: Japan travel to Hawaii strengthens
-----Travel: "Young and single" dominate Guam visitor profile
-----Business: Ikea returns to Japan
-----Business: Livedoor exits trade floor
-----Business: Female entrepreneurship rises in aging society
-----Society: Manga spurs wine popularity
-----Technology: BlackBerry heads to Japan
-----Fashion: Louis Vuitton plans more Japan expansion
-----Beauty: Rock bed and onsen spas are hot in Tokyo
-----Beauty: Lanc™me to open Japan's first "Mascara Bar"
*Culture Corner
*Media of the Month
*Upcoming Magazine Deadlines
*Important Dates

TRAVEL: JAPAN TRAVEL TO HAWAII STRENGHTEN

Visitor numbers exceed 2005 levels for the first time this year
Despite Hawaii's negative publicity in the aftermath of sewage spills and beach closures last month, both domestic and international arrivals are exceeding previous year levels, according to numbers reported by the state. Hawaii arrivals by air are running 11 percent better this April than last year - mainland arrivals up by 12.2 percent -- due in part to a robust Easter weekend. Overall international arrivals were up 7.5 percent in April, buoyed by a 3.1 percent increase in Japanese arrivals compared to last year. The number of Japanese visitors had dropped off during the first three months of 2005 - down 4.9 percent in March -- unleashing speculation that Japanese arrivals will not mimic last year's success. Increased economic optimism in Japan, continued interest in foreign travel, and an upward pace gearing towards Golden Week in early May, seem to be fueling the Japanese travel market.
(Sources: DBEDT; Pacific Business News 04/21/06)
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TRAVEL: "YOUNG AND SINGLE" DOMINATE GUAM VISITOR PROFILE

Number of married couples drop off this year as single travelers surge
The latest survey of about 400 randomly selected Guam visitors from Japan, compiled by QMark Research & Polling, showed that the percentage of unmarried travelers in March far exceeded that of married ones, and reached the highest level in the last six months at 83 percent. The "single" profile jumped 22 points since January, while the "married" profile plunged at the exactly same rate. Furthermore, the average age was 25.5 years old, with 94 percent of female visitors surveyed being unmarried. Seasonal travel is a considerable factor for the dramatic shift, since holidays are few after the New Year's, and students are back in school. The survey paints an overall picture of young, single women traveling with friends on extended weekends.
(Source: QMark Research & Polling for Guam Visitors Bureau April 2006)
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BUSINESS: IKEA RETURNS TO JAPAN

Time is ripe for European furniture retail giant to re-enter Japanese market
Joining an upward trend of foreign big box stores introducing mega-shops to Japan's more-spacious suburbs, Swedish furniture retailer Ikea opened its trademark, multi-floor, blue-and-yellow outlet in Chiba, to thousands of eager shoppers this April. Ikea pulled out of the Japanese market 20 years ago, due to an ill-prepared distribution system that shipped everything from Europe, as well as having failed to win over Japan's notoriously finicky customers. Whether those Japanese shoppers accustomed to smaller stores and attentive service will adapt to Ikea's mammoth outlets and self-assembly furniture this time around, remain to be seen. But with warehouses in Kuala Lumpur and Shanghai, Ikea seems ready than ever to penetrate the Asia market. The company's Japanese subdivision also conducted field studies on Japanese housing before developing its Chiba store, which features nearly 40,000 square meters (approx. 430,000 sqft.) of show rooms with 70 sample "room sets," complete with furniture and fixtures, specifically designed to fit the cramped quarters characteristic of Japanese homes. Ikea Japan is scheduled to open its second outlet in Yokohama in September, and a third in Kobe by next summer. Further, Ikea plans to operate four to six stores in each of the Tokyo and Kansai metropolitan regions in coming years.
(Sources: Kyodo News 4/24/06; www.thelocal.se 4/24/06)
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BUSINESS: LIVEDOOR EXITS TRADE FLOOR

Door closes on scandal-plagued Internet group as Horie and former-execs await trial
Livedoor was delisted from the Tokyo Stock Exchange on April 13, reaching the penny-stock level of 80 cents a share and a total market value of $843 million, about one-tenth of its 2004 peak. What now? Horie was recently released from detention on bail, while some 1,000 out of nearly 200,000 private investors are suing his firm for a collective loss of over $34 million in compensation for the lost stock values primarily incurred by Livedoor's wrongdoing. If the complaint moves forward, it can potentially be Japan's largest compensation suit, while insiders predict the investors' saga may take years to conclude through the courts. Meanwhile, one of Livedoor's active media partners, broadcasting firm USEN Corp., reportedly wants to capitalize on Livedoor's still-thriving Web portals, and is preparing to become the beleaguered company's primary shareholder. Livedoor would essentially become one of USEN's 34 subsidiaries.
(Sources: www.physorg.com 4/18/06; Kyodo News 4/22/06; www.bloomberg.com 4/26/06)
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BUSINESS: FEMALE ENTREPRENEURSHIP RISES IN AGING SOCIETY

Small business owners retire en masse as new businesses surge among women and elderly
An annual whitepaper issued by Japan's Small and Medium Enterprise Agency showed a mixed plate in small business trends, all largely affected by the upcoming retirement of Baby Boomers. One significant finding was an increasing number of women preparing to start new businesses, mostly in the service sector. Also among women, relatively younger age groups were successful in launching businesses, as 52,2 percent were aged below 40 in 2002. The document data also showed a higher success rate among women starting new operations than men. Meanwhile the number of small companies continues to decline, as has been the case since the peak of the bubble economy in the late 1980s - about 120,000 businesses have closed per year on average. And among 290,000 business owners who ceased operations between 2001 and 2004, 24.4 percent cited the lack of successors as a reason. But despite the natural progression of Japan's aging society, more seniors (60 and over) registered new businesses in 2002 than in 1997 - about 4.3 percent - supporting the agency's theory that many senior citizens become landowners and landlords, or open shops with their retirement allowance.
(Source: Kyodo News 04/28/06)
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SOCIETY: MANGA SPURS WINE POPULARITY

A California wine featured in Japanese comic reaches cult status
Ten years ago, a family-run California vineyard hit the proverbial "jackpot" through the most unlikely media source: a Japanese manga, which happened to feature its Pinot Noir. The comic, called "Sommelier," ran in a weekly comic magazine, starring a young wine steward named Joe Satake. In one episode, Satake blind-tasted a Calera Pinot Noir (about $20 in the U.S.) against the iconic Grand Cru of Burgandy, RomanŽe-Conti (about $3,000 and up). The Calera won, spurring frenzy among Japanese readers and wine fanatics who waited long lines at wine shops, hoping to score a bottle of Calera. The Calera Wine Club, a 300-plus-member group that regularly exchanges information through its Web site, is testament to the label's cult following to this day. Calera founder Josh Jensen says Japan sales held steady over the last decade in spite of Japan's slow economy, and is currently stronger than ever. He still sells about 23 percent of his vineyard's production to Japan, about 7,000 cases a year.
(Sources: Yahoo! Finance 4/21/06; www.japanwineclub.com; )
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TECHNOLOGY: BLACKBERRY HEADS TO JAPAN

Pilot in the works, as Canadian-born BlackBerry prepares for Japanese market
Research In Motion Ltd. will introduce the BlackBerry wireless Internet device to Japan as early as this year, pending a pilot launch in the coming months. Although RIM has not confirmed the release, the news confirms rumors that Vodafone would be bringing the BlackBerry to Japan, and that NTT DoCoMo is collaborating on the localization and Japanese-language interface. One IT analyst compared the possible BlackBerry launch in Japan to "giving stone tools to a technologically advanced race of super beings," but the bigger display and PC-like interface plus keypads may be a welcome break for tired eyes and weary thumbs. The Japanese BlackBerry is slated to look like the 8700 high-speed device introduced in North America earlier this year.
(Sources: National Post 4/24/06; www.dottocomu.com 4/20/06; www.gizmodo.com 4/24/06)
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FASHION: LOUIS VUITTON PLANS MORE JAPAN EXPANSION

LV catches onto Japan's graying society, hopes to attract and retain younger consumers
Japan's changing demographic doesn't affect just the nation's economy and politics; it forces organizations the world over to reevaluate their business plan, especially when the market in question is the single largest profit-maker (Japan reportedly contributes to about a third of the company's annual revenue). For Louis Vuitton Malletier, the decision was not to downsize their Japan presence in response to the declining birth rate - which would eventually lead to a decreasing demographic of their core customers: brand-conscious 20- to 30-somethings - but to become bolder and expand further. By satisfying young Vuitton customers, the company hopes to build lifelong brand loyalists who will continue to buy its products as they grow older. Vuitton chairman and CEO Yves Carcelle said his company will keep opening new boutiques in Japan beyond its current ten stores, which includes its biggest flagship in Omotesando. Vuitton also plans to increase its range of products, in addition to orchestrating a fashion show in Tokyo in June, the first to be held outside Paris.
(Source: Kyodo News 4/25/06; fashion.tokyoindicator.com 5/11/2004; www.winriver.net)
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BEAUTY: ROCK BED AND ONSEN SPAS ARE HOT IN TOKYO

Detox boom spurs urban, modern, club-like spas suitable for date night
While the custom of visiting the neighborhood "sentou," or public bath, thrives quietly within Tokyo's urban landscape, the "healing" and "detox" boom is fueling a renaissance of designer hot springs and luxurious lava rock spas catering to a younger, hipper crowd. Nine such spas made the list for the "Tokyo Best 100" edition of popular monthly lifestyle magazine "Casa Brutus," which ranked the city's most buzzworthy trends. Hot rock spas such as the Dragon Spa Roppongi features private rooms with two heated Mt. Fuji lava rock beds, a widescreen TV, shower, and killer views of Tokyo Tower. The sauna-like effect of lying on hot rock beds reportedly improves circulation, heightening the body's detox process. A 90-minute session runs about 8,000 yen (approx. $70), and weekends are booked solid, mostly by young couples. At the Four Seasons Hotel, the Yu Spa offers a more grounded, garden spa experience from one of its guest rooms facing a private Zen garden decked with its own outdoor hot spring bath. Non-guests are welcome to the hotel's spa treatments, also starting at 8,000 yen for two hours. The most decadent plunge - and a celebrity favorite -- is clearly the champagne spa at Ci-z Labo in Aoyama, where a two-hour soak in a tub filled with 22 bottles' worth of Dom Pierre champagne and a diamond crystal body peel costs 315,000 yen (approx. $2,780). Other Ÿber-popular Tokyo spas:

1. Roche.B at Azabu Juban; hot rock spa; www.bagus-spa.com
2. Ganbanyoku Terra at Shibuya; hot rock spa; www.ganban.co.jp
3. Detox Stone Spa at Ebisu; hot rock spa; www.detox-ss.com
4. The Spa at Mandarin Oriental; aromatherapy and jet bath spa; www.mandarinoriental.com/tokyo
5. Shie Spa at Shibuya; natural hot spring, women only; www.shiespa.com
6. Mizuki Spa at Higashi Shimbashi; Hinoki bath, members only

(Source: Casa Brutus April 2006)
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BEAUTY: LANCOME TO OPEN JAPANS FIRST "MASCARA BAR"

"Le Studio Mascara" and 360-degree mirror the latest upgrades to department store beauty counter
As a dominant force in Japan's competitive luxury cosmetics market, Lanc™me Paris has built a steady customer base loyal to its products geared towards Japanese consumers, namely foundation make-up and high-SPF sunscreen specifically formulated for Asian skin. The France-based beauty brand now plans to help Japanese women bid adieu to short and skimpy lashes with the introduction of "Le Studio Mascara" - the first of its kind - located at Seibu department store in Ikebukuro, Tokyo. The exclusive extension to Seibu's existing Lanc™me counter will allow shoppers to choose from about 10 different mascara "criteria," including volume, length, curl, waterproof, and color. A special mirror will let shoppers view their transformed lashes from every possible angle, including a look down from above their heads.
(Source: Tokyo Shimbun Shopper 4/21/06)
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BENTO - THE BOX LUNCH



Box lunches (bento) are very popular in Japan. They are often taken to school, picnics, or work. Box lunches are generally packed in a box called a bento box. It is a compact container designed to hold a single serving of rice and several side dishes. Traditional bento boxes are made of wood -- usually bamboo. Modern bento boxes are made of a variety of materials, including wood, metals such as anodized aluminum, and plastic. They are usually rectangular, oval, or circular in shape. They also have designer bento boxes, as well as boxes decorated with popular characters such as Hello Kitty. Some people like to go all out and buy matching chopsticks, silverware, and carrying cases to go with their bento boxes.



Half of a typical bento consists of rice, and the other half consists of several side dishes made with such ingredients as vegetables, meat, fish, and eggs. This format allows for infinite variations. The most common side dish is some kind of cooked egg, such as tamagoyaki (omelette strips or squares cooked typically with salt and sugar), fried eggs, scrambled eggs, and omelets with various ingredients. One long-standing staple of bento is a pickled Japanese plum, or umeboshi. This traditional food, believed to prevent rice from going bad, may be placed inside a rice ball or on top of a bed of rice. Other popular items include grilled fish, fried meat, fish cake, and vegetables of various kinds. The vegetables may be pickled, boiled, or steamed; cooked vegetables are used more often than fresh ones. For dessert, there might be an apple or tangerine.
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Chikyu No Arukikata Romance Hawaii Mook

Did you know that the Japanese honeymoon and wedding market grew 17.7% in 2005? In addition, this market has been consistent high spenders. These are some of the reasons why the Hawaii Tourism Authority is targeting this lucrative market. If you are looking for a way to reach the romance market, you should ask us about the Chikyu no Arukikata Romance Hawaii Mook.

This is a new publication from the leading Japanese travel publisher, Chikyu No Arukikata or Globetrotter. This unique publication will not only focus on the honeymoon and wedding market, but it will show readers experiences that will make them fall in love with Hawaii. Therefore, it is not limited to a romantic couple. It will show readers how they can have a great vacation if you are a mother and daughter traveling together or even tow women who are friends. The Romance Hawaii Mook will also include information on shopping, spa, dining, activities and accommodations.

Don't let this important opportunity pass you by. If you are interested in finding out more about advertising in this publication please contact Lynelle Lingaton at llingaton@pacrimmarketing.com

Click here for our Media Request Form or contact us.

Space Deadlines:

NOW! Chikyu no Arukikata Honolulu Mook
NOW! Chikyu no Arukikata America Guidebook
NOW! Chikyu no Arukikata Guam Mook
NOW! JAL Hawaii Guide
NOW! Aloha Express Quarterly July 2006
6/1 Chikyu no Arukikata Guam with Kids
7/1 Aloha Express September 2006
7/1 Chikyu no Arukikata Romance Hawaii Mook
7/1 Chikyu no Arukikata Maui Resort

Material Deadlines:

NOW! Chikyu no Arukikata Honolulu Mook
NOW! Chikyu no Arukikata America Guidebook
NOW! Chikyu no Arukikata Guam Mook
NOW! JAL Hawaii Guide
NOW! Aloha Express Quarterly July 2006
7/1 Chikyu no Arukikata Guam with Kids
7/10 Aloha Express September 2006
7/1 Chikyu no Arukikata Romance Hawaii Mook
7/1 Chikyu no Arukikata Maui Resort

It is not too late to call us (808-949-4592 or Toll Free 1-800-338-4502) to find out more about these upcoming media releases as we strive to find the best media available for you.

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Upcoming Holidays in Japan

05/03 Kenpo Kinenbi - Constitution Memorial Day
05/04 Kokumin no Kyujitsu - Citizens' Holiday
05/05 Kodomo no Hi - Children's Day
05/03 Golden Week Begins (ends 05/07)
07/17 Umi no Hi - Marine Day
09/18 Keirou no Hi - Respect for the Elderly Day
09/23 Shuubun no Hi - Autumnal Equinox Day

Click here to see all Japanese holidays for 2006.
Click here to see all US holidays for 2006.

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